Sasan Ultra Mega Power Project

Sasan Ultra Mega Power Project is one of nine Ultra Mega Power Projects proposed by the government of India as part of a strategy to add an additional 100,000 megawatts of generation capacity by 2017.

The 4,000 megawatt (MW) project is in the state of Madhya Pradesh and is being developed by Sasan Power, a wholly owned subsidiary of Reliance Power. The project is slated for completion by 2013.

Project details
On its website, Reliance power states that the project will comprise six 660 MW coal-fired supercritical units. "The Sasan project is scheduled to be on-stream by December 2013, when the first 660 MW unit comes on-line. The project is scheduled to be fully commissioned by April 2016. The estimated cost of the Sasan project is Rs. 18,342 crore, which includes the initial capital costs related to the mining of coal," Reliance Power states.

The company states that a "Power Purchase Agreement has been executed with 14 Procurers comprising 7 States and their off take would be as follows; Madhya Pradesh (Lead Procurer) will be entitled for 37.50% share, followed by Punjab(15%), Uttar Pradesh(12.5%), Delhi(11.25%), Haryana(11.25%), Rajasthan(10%) and Uttarakand (2.5%)."

Coal supply
Reliance Power states that the power station will be located "approximately 25 km from three captive pithead coalmines". The company stated in a media release in 2007 that power station is expected to consume over 15 million tonnes per annum of coal "making it the single largest captive coal mining operation by private sector in India across any industry."

The coal for the proposed plants is slated to come from the Moher coal mine, the Moher-Amlori Extension coal mine and the Chhatrasal coal mine. While Reliance described the coal mines as captive, in 2009 the prospect that coal from these mines could be dispatched to other markets became the subject of legal action.

U.S. U.S. Export-Import Bank rejects loan ... and then changes its decision
In late June 2010 the Export-Import Bank of the United States rejected Reliance Power's request for a $650 million loan for the project. "We’re not doing the deal," the banks spokeswoman Stephanie O’Keefe told Bloomberg. Doug Norlen, policy director for Pacific Environment said that the decision set an important precedent. "It’s the first time Ex-Im ever turned down a project based on the climate implications," he said. A bank spokesman said that the baord of directors voted 2-1 against the project.

Days after turning down the request by Reliance, state Democrats complained that 1,000 jobs would be lost if the deal didn’t go through, and on the eve of a visit from President Obama to Wisconsin, the bank asked Reliance to submit a revised bid that added a pledge to build “among the largest renewable projects built in India to date” with the help of American green tech. The protests of equipment manufacturers were taken up by several members of Congress, including Republican Congressman Jim Sensenbrenner, who serves on the House Committee on Energy Independence and Global Warming. In a letter to President Obama Sensenbrenner wrote that "denying jobs to American workers is no way to address climate changes or energy independence. India will still build the coal-fired plant, just not with U.S. money or equipment."

In July 2010 the bank reversed its decision. The bank calls the situation “a win-win” for the environment and exporters. Some environmentalists call it greenwashing. "They collapsed like a wet paper bag," says Doug Norlen of the nonprofit group Pacific Environment.

A July 14 Ex-Im Bank press release stated the agency’s renegotiated financing for Sasan will result in a new 250-MW renewable energy project: “[S]ubsequent to that [renegotiated] vote, Reliance Power has executed a memorandum of understanding (MOU) with Ex-Im indicating Reliance's intent to develop a new 250 megawatt renewable energy facility, which when built will rank among the largest renewable energy projects in India.” Ex-Im Bank Chairman Fred Hochberg later echoed this claim in sworn testimony to Congress, saying that following the renegotiation, the Sasan project sponsor, Reliance Power Ltd., “executed a Memorandum of Understanding agreeing to supply 250 MW of renewable energy sourced from the United States.”

However, Friends of the Earth says it obtained a copy of the MOU through the Freedom of Information Act, and that the MOU reveals Hochberg’s statements are false. The MOU refers to potential Ex-Im Bank support for “current planned investments to build 250 megawatts of renewable energy power plants,” showing the renewable energy projects were already planned. Also, the MOU is signed just by Hochberg--not by Reliance Power, the project sponsor. Ex-Im is now considering an even bigger coal project, the Kusile Power Station, in South Africa.

Carbon credits
As of July 2011, five "high-efficiency" coal power plants, including Sasan, were registered under the UN's Clean Development Mechanism -- four in India and one in China -- meaning they are all eligible to earn certified emissions reductions (CERs) that they can sell. The five registered power projects involve two from Reliance Power totalling 8,000 MW, two projects totalling 2,640 MW from Adani Power and a 2,000 MW ultra-supercritical plant by Shenergy in China.

According to U.N. data, the five projects are eligible to receive a total of 68.2 million CERs over a 10-year crediting period. That is worth 661 million euros ($919 million) based on current prices of CERs traded on the European Climate Exchange of 9.70 euros.

Reliance's Krishnapatnam Ultra Mega Power Project will receive 12.3 million CERs and the firm's other 4,000 MW plant, Sasan Ultra Mega Power Project in Madhya Pradesh, will receive 22.5 million. Total carbon dioxide emissions from the five projects, based on data from project design documents, over the 10-year crediting period is 673 million tonnes.

Related SourceWatch articles

 * India and coal
 * Reliance Power
 * Tilaiya Ultra Mega Power Project
 * Krishnapatnam Ultra Mega Power Project

External resources

 * "Indian Sasan Coal Fired Power Project Factsheet," Sierra Club